New to REI and ready to get to work in Austin Tx

[Elliott Joyce]

Hello everyone! I'm not sure how long I should make this, but if I figured if I'm looking to work with other people, it would be good to clearly state what I'm after!

My name is Elliott Joyce and I am making the jump to pursue Real Estate Investing after years in the Motorsport industry. I recently moved to Austin Tx, so I am fresh to the area as well! About me, Cali born, moved around a bunch, landed in Reno NV after high school and worked in the Motorsport industry for the past 11 years. Spent the last few years as GM for a KTM dealership, and as fun of an industry as it is, I was burned out. Had a couple years in between Moto shops that I worked for Western Nevada Supply, and that really opened my eyes to real estate. Was able to step foot in 100's of homes, from track home developments, to restorations on some vintage houses, to full on multimillion dollar estates. I got excited every time Id get to see a final project after following it from the beginning. Also, people always don't always need a new motorcycle, but they always need a roof over their head.

So enough about me, down to business. I am here because I needed a change, and the thought of going back to a 9-5 is absolutely terrifying. I was able to position myself so I can focus on this full time and not need to have a day job, at least for a while, as well as have some funds to work with for rehabs or flips. So I am determined to make this work. I have actually been floating in the background on this site and others for some time doing as much research as I can. Went through the Beginner Guide, almost every associated link to the guide, multiple webinars, as well as posts from members for topics I am interested in. But I can only study so much and at some point I need to get my feet wet. So, as instructed, I defined my plan for short, and long term.

So for my mission plan. Start with flips (wholesale), as many do. From there, transition into rehabbing, as it lends a higher payout per deal (from what I've seen). Ill leverage into rentals at some point, but rehabs are what excites me due to the flexibility, and fun factor. I know rentals are the key to long term success, so multi family will be what I look at mainly for the unit per loan advantage. Of course if there is an SFR deal that would make sense to hold, Ill add it to the portfolio. Once I start really getting into rentals, the idea would be to add 1 unit every other month to the portfolio. This is a bold plan, but I'm looking YEARS ahead to stay focused. I know most people say leverage into more units before paying off a unit as to not tie up funds (safety through numbers etc), but I like the idea of paying off 1 in 3 units owned.

For marketing, it seems there are plenty of ways to find cash buyers for deals. For finding actual sellers, I am looking into online tactics and have started working with a CRM and SEO. I figure its the way things are moving tech wise and the ROI pencils out for something that can basically run in the background of my other efforts. This section I would love advice on.

So, if anyone has advice on places to meet or attend in Austin, please let me know. If anyone would like to meet up, I'd love to buy you a cup of coffee and pick your brain. Or if there are any flippers / rehabbers out there, Ill trade labor for knowledge! I am highly motivated to make this work, and where I know most people get discouraged thinking this is a get rich quick, for me "rich" is making $40k a year signing my own checks.

Thank you!

[Alex G.]

"....but rehabs are what excites me due to the flexibility, and fun factor..."

Man, there is very little fun in rehabs themselves unless you have natural predisposition for doing construction.

- They are extremely cash intensive.
- Given where Austin prices are, they usually require you getting a hard money loan. 
- They take a long time to complete (and a lot longer if you have have to get permits). 
- They generate high carrying costs from interest, taxes, insurance, utilities. I.e., you have to manage negative cash flow for extended periods of time.
- You don't see any of your profits for a LONG time.
- They are an enormous drain on your personal time even if you have a GC.
- They often end up with you running over your original budget and in most cases they take longer than you planned... Both of those things cut heavily into your original estimates of profits.
- There is a possibility you won't sell your property for a price high enough to justify selling and you may have to rent it for a while (oh, and incur a bunch of new financing & title co costs to refi out of your hard money loan).

The ONLY fun things about them are: (a)  they are finally over, and (b) hopefully, you produced a good product and sold it with a profit... latter isn't guaranteed as you could guess from the earlier discussion.

Consider negotiating your purchase prices harder and "wholetailing" instead of rehabbing. I.e., close the purchase, haul the trash, put it in MLS at a reduced price and sell to bargain hunters. It's a lot safer, your profit usually comes within 30-60 days from purchase, you do no rehab work at all (and incur no related expenses).

In sum, your remove almost all the risks & costs associated with rehab,  your profit is often a good bit higher than wholesaling the same property and often not much lower than doing rehab & selling retail. Now, that's fun in my book.

Happy bargain hunting!